Cement in Belgium and the Netherlands

The Belgian capital Brussels is at the heart of Europe, hosting the European Parliament and the European Commission.

Amsterdam, the capital of the Netherlands, is famed for its narrow houses and canals. The city was once the heart of the Dutch Empire, which controlled numerous territories in the Far East as well as parts of modern-day India, South America, the US, South Africa and Taiwan.

GDP/capita levels (in 2010 US$) for Belgium and the Netherlands from 1980-2010.(8)

Introduction

With an area of just 30,528km2 the Kingdom of Belgium is the third smallest country in the EU after Cyprus (9251km2) and its southern neighbour

Luxembourg (2586km2).1 Belgium also shares borders with France to the southwest, the Netherlands to the northeast and Germany to the east.

Its efficient, modern infrastructure, location adjacent to the North Sea and open borders with all of its EU neighbours has made Belgium an important trading nation. It benefits from its proximity to Germany especially, with 19% of its exports destined for that country in 2010.2 Its other important export markets include France (17%), the Netherlands (12%) the UK (7%), the US (5%) and Italy (5%). It imports from a similar group of nations, dealing primarily with the Netherlands (19%), Germany (16%), France (11%), the UK, US, Ireland and China (~5% each). Belgium's industrial sector is strong, occupying around a quarter of its workforce.2

Belgium's 10.5 million inhabitants2 are split into two main linguistic camps, the Flemish area in the north, which speaks Flemish, and the southern Walloon region, which speaks French. The two areas have strong independent identities that stem from historical influences. There is a much smaller German-speaking area near the German border in the east.

The Netherlands

The Netherlands, technically one constituent country in the Kingdom of the Netherlands, (which includes various Caribbean territories), sits on the coast of the North Sea in between Belgium to its southwest and Germany to its east and northwest. Much of the country is very low lying, with 50% of its 41,500km2 of land3 lying less than 1m above sea level.4 Much of the land in coastal areas has been reclaimed from the sea such that wide areas are in fact below sea level.

Like Belgium, the Netherlands has strong trade links with its immediate neighbour Germany.4 It also has a strong trade relationship with Belgium. The country is a major European trading hub due to its extensive North Sea coastline and highly-developed road and rail infrastructure. Indeed, the port of Rotterdam is among the largest in the world.5 It is a major entry point to the EU for importers from around the world. Similarly, Schiphol, Amsterdam's main airport, is Europe's fourth busiest and a major hub for cargo and commercial flights.6

Over a quarter of the Netherlands' exports go to Germany, with 13% destined for Belgium, 9% for France, 8% for the UK and 5% for Italy in 2010.4 It imports from Germany (16%), China (13%), Belgium (8%), the US 7%, the UK (6%) and Russia (6%).4

The Netherlands' population of 16.8m is high for its area.3 This gives the country the highest population density in the EU at nearly 400/km2.

History

Belgium

The history of Belgium is closely linked to that of its close neighbours, Germany, France and the Netherlands. Briefly a republic in 1790, the areas now covered by the Kingdom of Belgium were variously part of the French Empire / Republic (1795-1815) and the United Kingdom of the Netherlands (1815-1830). Continued influence of these two countries over hundreds of years gave rise to the French and Flemish speaking areas that exist until now. In 1830 the country gained independence from the Netherlands, becoming the Kingdom of Belgium as it is today.

In the First World War Belgium was invaded by German forces despite its neutral stance. Belgium was forced to fight back. The country became the front line and was devastated by the fighting. Belgium adopted the same neutral stance on 3 September 1939 after Nazi Germany invaded Poland. However, the result was the same, with the Nazi forces invading within months of the start of the conflict. The country was liberated by UK and Canadian forces in 1944.

Since 1945 the country has seen rapid economic growth like many countries in Europe. It was a particularly significant beneficiary of the US-led Marshall Plan to rebuild war-torn Europe due, once again, to being at the centre of much of the European fighting. During this time a steady re-balancing of the economic heart of the country away from the Walloon areas in the south was brought about through investment in formerly rural northern areas.

Belgium was quick to embrace international organisations after the war and is a founder member of NATO and the pre-cursor organisations to the EU, which have existed in a number of forms since 1951. Today Belgium is truly at the heart of Europe, hosting the European Parliament and the European Commission in its bilingual capital Brussels.

The Netherlands

Like Belgium, the Netherlands has a past that is intimately entwined with its European neighbours. Between 1581 and 1713 the southern parts of the modern-day Netherlands were ruled by Spain alongside the Dutch Republic in the north (1581-1795) and by the Austrian Empire (1713-1795). Annexed by Napoleon as part of the French Republic / Empire from 1795 to 1815, the country became the United Kingdom of the Netherlands (incorporating modern-day Belgium and Luxembourg) until 1890 when Luxembourg became fully independent. Belgium had left to form a separate Kingdom in 1830.

During the First World War the Netherlands declared itself neutral and was not invaded. It accepted a large number of refugees from a variety of fronts, mainly from over the border in Belgium.

The country again declared neutrality in the Second World War, but this only lasted until invasion by Nazi forces in May 1940. The Dutch were ill-prepared to fight and the country was taken easily, allowing the Nazis access to the country's excellent seaport facilities. The Royal family and much of the government escaped to London following the invasion with Germany annexing the country until the end of the war. The country was compelled by force to assist the Nazis, although an increasingly large and effective underground resistance became increasingly important as the war continued. The country was liberated gradually in 1944 and 1945.

Keen like many in the region to never again repeat the mistakes of the two wars, the Netherlands, along with Belgium, West Germany, Italy, France and Luxembourg began the process of European integration in 1951. The Netherlands was a keen enthusiast of the Euro currency project and participated in the introduction of the Euro between in 1999 and 2002.

Modern economies

Belgium and the Netherlands are well-developed, modern economies, which have seen very strong economic growth since the Second World War.

The two countries have very similar levels of agriculture, manufacturing and service industries.2,3 As can be seen from the graph below, their GDP/capita are almost identical, having increased around five-fold since the mid-1980s.8 Both benefit from their geographic location at the trading centre of Europe.

Belgium

Belgium has a unique domestic economic set-up, with its Walloon and Flemish regions operating largely independently. Traditionally the richer area, the French-speaking Walloon area has been overtaken by the Flemish area in economic terms due to its declining heavy industries, notably steel.9 Light industry spread to the Flemish region rapidly from the 1950s onwards, helping to develop this previously rural area.

Nationally, Belgium is a major importer of raw materials, and exports finished or semi-finished products.2 The country's GDP has grown in four of the past five years, increasing in 2007 (2.9%), 2008 (1.0%), 2010 (2.3%) and 2011 (2.5%).10 The country was officially in recession in 2009, when its GDP contracted by 2.8%.

Belgium's current economic situation is more stable than some other EU member states, with an AA rating from Standard and Poors.11 This rating is higher than Ireland, Spain, Portugal, Italy and Poland. Despite this, its position as a manufacturer and transport hub means that its position is affected by changes in commodity and fuel prices.

The Netherlands

The Netherlands is a strong European economy at the heart of the continent. Its economy has grown rapidly in recent times, by 3.9% in 2007, 1.8% in 2008, 1.7% in 2010 and an estimated 1.6% in 2011.12 In line with other world economies the Netherlands saw a 3.5% contraction in 2009. In 2011 the country's economy was the 16th largest in the world as well as 16th in GDP/capita.13

It is expected that the economy will decline by 0.4% in 2012. This assessment, based on a 'muddling through scenario,' in which the Eurozone crisis is neither solved nor worsens, forecasts marginal growth in the second half of the year.14

The Netherlands' main economic drivers aside from transportation are the food-processing, chemical and petroleum industries, typified by the multinational oil giant Anglo-Dutch Shell.

BELGIUM

GDP (2011 est.)

Euro311bn (US$412bn)

GDP/capita (2011 est.)

Euro28,400 (US$37,600)

Population (July 2011)

10.4m

Area

30,528km2

Integrated cement plants

5

Integrated cement capacity

6.35Mt/yr

Average plant capacity

1.27Mt/yr

THE NETHERLANDS

GDP (2011 est.)

Euro532bn (US$706bn)

GDP/capita (2011 est.)

Euro31,900 (US$42,300)

Population (July 2011)

16.8m

Area

41,543km2

Integrated cement plants

1

Integrated cement capacity

1.1Mt/yr

Average plant capacity

1.1Mt/yr

Tables: Summary socioeconomic and cement industry data for Belgium and the Netherlands.­2,3,7

Cement industry - Belgium

Introduction

Belgium has five integrated cement plants, all but one of which are located within a short distance of the French border to the southwest.7 The other plant is located at Lixhe in the east, close to the borders with Germany and the Netherlands.

Belgium consumed 4.2Mt of cement in 2010, although it also exported 1.7Mt.15 Over 95% of the exports were destined for the EU, mainly to France and the Netherlands. In 1980 the Netherlands took 71% of Belgian cement exports, but by 2005 this had halved to just over 35%. Much of the exports now head to France, which took just 0.4% of Belgian cement exports in 1980, but 44% in 2005.15

Of the cement produced in Belgium, nearly 20% was used in civil works, 36% was used in residential construction and 44% was used in non-residential construction.15 Over half, 54%, of the cement produced was some form of blended cement, with OPC taking 46% of the total production.15 The clinker substitution rate was 47.3%.15

CBR

SA Cimenteries CBR Cementbedrijven NV (CBR) is owned by Germany's HeidelbergCement. It is the primary cement producer in Belgium, with three integrated cement plants and a total cement capacity of 4.2Mt/yr (grey) and 0.18Mt/yr (white).7 It is the only manufacturer of white cement in the Benelux region. The company had a turnover of Euro388m in 2010.16

CBR's Lixhe facility is the company's oldest integrated cement production site. It was established by the Bank of Vise in 1950 to take advantage of limestone reserves in the east of Belgium.17 It was positioned adjacent to the Albert Canal so that its product could be transported to other areas of Belgium as well as Germany and the Netherlands. Today it has enviable international and domestic rail and road links.

The 1.45Mt/yr Lixhe site covers 16 hectares and produced 1.2Mt of cement in 2010.17 The plant achieved an alternative fuel substitution rate of 65% in 2010, saving 65,000t of oil, the equivalent of the energy needs of 12,000 families. Carbon-neutral biomass constituted nearly 45% of the alternative fuel used.

CBR's second production plant, which is located at Tournai, was officially established in 1986 although the site had been used as a crushing facility since the mid-1970s.18 Positioned on the Schelde, the 0.95Mt/yr plant produces OPC clinker, which is shipped to the company's Ghent grinding plant and Heidelberg Cement's ENCI Rotterdam and ENCI IJmuiden slag cement grinding facilities in the Netherlands.

In 2010 the Tournai plant produced 0.69Mt of clinker. Its alternative fuel substitution rate was 57% with 32% of the alternative fuels comprising carbon-neutral biomass materials.18

Like the Tournai site, CBR's Ghent plant dates from the mid-1970s. In 2000 the plant was upgraded from its previous 0.6Mt/yr capacity to 1.5Mt/yr.19

CBR Harmignies is the only plant in the Benelux region that produces white cement.20 It produced 0.16Mt of white cement in 2010, when it used 37% alternative fuels, a saving of enough oil to supply over 6000 families. Carbon-neutral biomass comprised 11% of the alternative fuels that were used.

Holcim

The Swiss multinational cement producer Holcim Ltd has an integrated cement plant located at Obourg.7 The plant began production as 'Ciments Artificiels de et à Obourg' with a production capacity of just 65,000t/yr in 1911.21 The Swiss Schmidheiny Group (later Holderbank) took control of the plant in 1925, injecting much-needed cash into the business.21 The plant underwent a major expansion in the late 1960s with the construction of two new kilns. In 2001 Holderbank relaunched itself as Holcim with Ciments Artificiels de et à Obourg rebranded as Holcim Cement and Holcim Aggregates. The plant celebrated its centenary in 2011 and currently has a production capacity of 1.77Mt/yr.21

The Obourg plant is supported by a grinding plant at Haccourt in the east of Belgium.22 It has a capacity of 0.5Mt/yr and produces mainly blast furnace slag cement. It sources its clinker exclusively from Obourg.

Holcim's cement operations are complemented by a raft of 19 ready-mix concrete facilities, which are spread throughout the country, mainly in the north.23

CCB

Compagnie des Ciments Belges (CCB), was founded at Gaurain-Ramecroix in the west of Belgium, near to the French border, in 1906. Fully owned by Italy's Italcementi Group since 2010, the plant has a 2Mt/yr cement capacity7 and provides a variety of standard and non-standard types of cement.

CCB benefits from being situated next to one of the largest quarries in Europe, which not only provides the limestone for cement production, but also material for the aggregates that are produced on the same site.24

To reduce its fuel consumption and reduce its impact on the environment, the plant started to co-process municipal waste from the nearby town of Gaurain-Ramecroix in its kilns in 1997. Alternative fuels now represent over 20% of the plant's thermal energy requirement. The site has the best available environmental protection technologies, in particular to limit dust and NOx emissions. A recent investment in new bag filters reduced dust output by a factor of five. CCB has nine concrete plants in Belgium.

Other players

As well as the integrated cement plants listed above, there are major grinding plants owned by the Irish building materials giant CRH and by Espabel, a consortium of Spanish investors.

In summer 2011 CRH bought into the Belgian slag cement market with the purchase of VVM Group, which has two grinding plants in the country. It has a total capacity of 1.5Mt/yr and a ready-mix concrete plant. The Espabel plant, recently built at the port of Ghent at a cost of Euro27.9m grinds OPC clinker.

The multinational cement players Cemex and Lafarge do not have any cement production or grinding sites in Belgium, although they supply materials from over its borders.

Cement industry - The Netherlands

Introduction

Due to its many coastal and inland waterways, the Netherlands is in a position to move large quantities of imported material by barge to inland locations that would be impossible for other nations.

While limiting the distances over which cement is transported by road or rail lowers costs, the prevalence of open water in the Netherlands' landscape also creates some disadvantages for the concrete industry. This in turn affects the types of cement that are required. The Netherlands' moist and, in places, salty environment means that concrete durabilty is a high priority, especially in areas where the water table is elevated. As a result, the cement industry is dominated by blast furnace slag cement, which offers improved durability to concrete structures.

The Netherlands does not have significant limestone, which makes it dependent on imported clinker and cement, both by sea and from over the border in Germany and Belgium. While the country only has one integrated cement plant, with a capacity of 1.1Mt/yr,7 it produces 2-3Mt/yr by importing foreign clinker. The Netherlands consumed 4.76Mt/yr of cement in 2010, down from a peak in 2000 as shown below.15

Year

Consumption (Mt)

1990

5.54

1995

5.3

2000

6.25

2005

4.85

2010

4.76

Table: Cement consumption in the Netherlands for selected years.

ENCI

The only integrated cement plant in the Netherlands is the Eerste Nederlandse Cement Industrie, (ENCI) which literally translates as 'first Dutch cement industry.' Founded in 1926, the 'first' in its name has always been redundant, given that there was never a tweede (2nd) or derde (3rd) integrated cement plant built in the country. It primarily produces OPC.26

Now owned by the German multinational cement giant HeidelbergCement, the plant is located in the south of the Netherlands in Maastricht, very close to the Belgian and German borders. It runs a single dry production line with a capacity of 1.1Mt/yr,7 which as at 2011 used over 85% alternative fuels.15 It benefits from the same area of limestone as CBR's Lixhe plant in Belgium, which is only 12km to the south.

ENCI has agreed a license to extract limestone from its quarry until the end of June 2018, 92 years after it began production. Beyond 2018 it will turn the plant into a grinding site.27 In preparation, the site is currently undergoing an extensive revamping project to turn it into a centre for innovative building materials as well as a plant. A variety of outside companies have rented space at the site since 2009 in line with an agreement between the plant and authorities in Maastricht and Limburg Province.

The Maastricht site is complemented by grinding facilities in the port city of Rotterdam and the town of IJmuiden, which is close to Amsterdam. The IJmuiden site has produced blast furnace cement since 1931 using imported clinker and blast furnace slag from an adjacent Tata Steel facility. In 2009 the facility shipped 0.85Mt of blast furnace cement to its customers.28

The Rotterdam site, which also produces blast furnace cement, has been operational since 1964. Like the IJmuiden plant it grinds imported clinker with blast furnace slag, although it is smaller than IJmuiden, with an output of around 0.34Mt/yr.29

As ENCI's main customers are concrete plants and builders that use cement for concrete, the Rotterdam site also hosts a concrete research centre. This enables easy communication between cement production, research and the customer. The research facility also serves HeidelbergCement's Belgian interests.

Between them, the IJmuiden and Rotterdam plants produce four different types of blast-furnace cement. The company's different varieties have been developed in response to specific market needs by the Rotterdam research centre. The whole of ENCI had a cement capacity of 4.6Mt/yr in 2010.16

Other players

Cementbouw: Cementbouw Handel & Industrie is an important Dutch trader in cement, fly-ash and aggregates and is one of the leading ready-mixed concrete producers in the Netherlands. Its Binding Agents & Logistics division is a major player in the Dutch cement trading and distribution market and is one of the leading suppliers of fly-ash in the Netherlands.

Its Ready Mix division operates a significant network of well-located ready-mixed concrete plants, primarily in the more densely populated western regions of the Netherlands. Its subsidiary company Heemex operates 140 bulk road tankers and 15 inland waterway barges.

Cemex: The Mexican multinational cement giant Cemex has a minor interest in the Netherlands, with five ready-mix concrete plants in the south of the country.30 These are supplied with cement and aggregate from the Cemex WestZement plant in Beckum in north west Germany. The company also imports aggregate by barge to the inland city of Venlo on the river Maas.

Cement industry - Future

There is no overwhelming need to develop new cement capacity in Belgium or the Netherlands, indeed there hasn't been for some time. Both countries enjoy an established infrastructure and have low population growth, which removes two major sources of cement demand.

The two countries' cement industries have therefore not been as badly hit as in developing areas in, for example, Eastern Europe. Producers have been able to respond by way of incremental projects and improvements to efficiency, something that they have significant experience in due to stringent environmental regulations.

These minor, continuous improvements are likely to continue, providing ways for producers to lower their emissions and maintain margins in a low-growth and unpredictable market.